Futarchy: Vote Values, But Bet Beliefs

Here's an intriguing suggestion to use the power of the Wisdom of crowds.
"In futarchy, democracy would continue to say what we want, but betting markets would now say how to get it. That is, elected representatives would formally define and manage an after-the-fact measurement of national welfare, while market speculators would say which policies they expect to raise national welfare. The basic rule of government would be:
When a betting market clearly estimates that a proposed policy would increase expected national welfare, that proposal becomes law.
Futarchy is intended to be ideologically neutral; it could result in anything from an extreme socialism to an extreme minarchy, depending on what voters say they want, and on what speculators think would get it for them.
Futarchy seems promising if we accept the following three assumptions:
* Democracies fail largely by not aggregating available information.
* It is not that hard to tell rich happy nations from poor miserable ones.
* Betting markets are our best known institution for aggregating information."
Still thinking about this, but interested in any leads or further thoughts.
Futarchy: Vote Values, But Bet Beliefs: